EU sanctions on Russia in limbo

EU countries have adopted a new round of sanctions against Russia, but cannot agree when or whether to implement them.

A statement by EU Council chief Herman Van Rompuy on Monday (8 September) said the measures are due to “the aggression by Russian armed forces on Ukrainian soil” after several thousand Russian soldiers and hundreds of armoured vehicles joined rebel forces in east Ukraine last week.

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Poroshenko in Mariupol on Monday. The US said the ceasefire is 'mostly holding' (Photo: president.gov.ua)

He noted that their entry into life “will take place in the next few days”.

He added, however: “This will leave time for an assessment of the implementation of the [Ukraine] ceasefire agreement and the peace plan. Depending on the situation on the ground, the EU stands ready to review the agreed sanctions in whole or in part”.

The statement comes after four days of internal talks.

Last Friday, while EU leaders criticised Russia at a Nato summit in the UK, their ambassadors in Brussels were busy carving out restrictions on companies or products that would harm their country’s economies.

EU officials over the weekend introduced the changes into legal documents, with plans for adoption on Monday and implementation on Tuesday.

But on Monday a handful of EU countries refused to agree, prompting an emergency ambassadors’ meeting from 6pm to 9.30pm which came up with the Van Rompuy solution.

Diplomatic sources told EUobserver the anti-sanctions group includes Finland and Italy, which have strong business ties with Russia. But it does not include Slovakia, also a sanctions sceptic, which secured the opt outs it wanted on Friday.

Despite Van Rompuy’s promise that implementation “will take place”, one EU diplomat said nothing is guaranteed. “Ambassadors might come back to evaluate the situation on Wednesday. So everything remains fragile”, the contact noted.

Ukrainian president Petro Poroshenko agreed the ceasefire last week.

The US State Department said on Monday it "is mostly holding, although there are reports of mortar attacks and small arms fire around Mariupol and the Donetsk airport" in east Ukraine.

Poroshenko, who visited Mariupol the same day, added that he and Russian leader Vladimir Putin “continued co-ordination to support the ceasefire” in a phone call.

But for their part, pro-Russia rebels in Donetsk said they still want independence.

The new EU sanctions are to further tighten Russian banks, energy, and defence firms’ access to EU capital markets. They are to target a subsidiary of Gazprom, Gazprom Neft, oil companies Rosneft and Transneft, and nine defence firms.

They are also to extend a list of dual-use products and oil-drilling items under an export embargo and to add 24 names to an EU visa ban and asset freeze list.

Russia has already retaliated with a trade ban on EU food.

Its prime minister, Dmitry Medvedev, told the Vedomosti newspaper on Monday: “Sanctions are always a stupid idea. They backfire and you end up hurting yourself”.

He noted the food embargo is “supported by the vast majority of Russians”, but indicated Russia might introduce more exemptions on goods which it cannot replace from other sources.

He also threatened to “bankrupt” EU airlines if the bloc imposed new sanctions by introducing an “asymmetrical” ban on Russia overflights by Asia-bound planes.

“We’ll have to respond to any restrictions imposed on us. If Western carriers have to bypass our airspace, this could drive many struggling airlines into bankruptcy”, he said.